William Lyon Homes Profit Tops Estimate, Sales Misses; Stock Down - Update

(RTTNews) - William Lyon Homes (WLH), a home builder in the Western U.S., Friday reported a decline in third-quarter profit, hurt by shoddy gross margins, even as revenues climbed on the back of an increase in home deliveries and sales prices. Earnings, however, topped Wall Street estimates, but revenues badly missed expectations.

Following the announcement, William Lyons shares slid 8 percent in after-hours trade on the New York Stock Exchange.

William Lyon, based in Newport Beach, California, posted quarterly net earnings to stockholders of $5.6 million or $0.17 per share, compared with $7.6 million or $0.24 per share last year.

Excluding items, earnings for the quarter were $0.31 per share. On average, four analysts polled by Thomson Reuters projected earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the third quarter climbed 37 percent to $206.9 million from $150.8 million in the prior year. Analysts estimated revenues of $241.3 million for the quarter.

Home sales revenues rose 39 percent, with new home deliveries up 19 percent and average selling price up 16 percent.

Home building gross margin for the quarter was 19.6 percent, compared with 23.6 percent last year.

Operating expenses for the quarter rose to $197.6 million from $133.9 million a year ago.

For the fourth quarter, William Lyon expects 650 to 700 new home deliveries and home building revenues of $300 million to $330 million.

The company's backlog for homes was $382.9 million as of September 2014, an increase of 84 percent from a year ago.

In August, William Lyon completed its acquisition of the residential homebuilding business of Polygon Northwest Homes, the largest private homebuilder in the Pacific Northwest.

WLH is trading at $22.45, down $1.97 or 8.07%, on a volume of 99k shares.